Question

LOGI 1020 Project 1 - Production Activity Control CASE STYDY 6. 1 Johnston Products No matter how many times Justin Wang, the master scheduler for Johnston Products tried, he could not seem to get it through people's minds. They kept trying to "front load" the production schedule, and the problem appeared to be getting worse. By "front loading”, Justin meant that production supervisors would attempt to catch up with production they failed to make the previous week. It seemed to happen every week, and the only way Justin could get things back to a realistic position was to reconstruct the entire master schedule-usually about every three weeks. Last month could serve as an example. The first week of the month Justin had scheduled production equal to 320 standard hours in the assembly area. The assembly area managed to complete only 291 hours that week because of some equipment maintenance and a few unexpected part shortages. The assembly supervisor then had the workers complete the remaining 29 hours from week l at the start of week 2. Since week 2 already had 330 standard hours scheduled, the additional 29 hours really put them in a position of attempting to complete 359 hours. The workers actually completed 302 hours in week 2, leaving 57 hours to front load into week 3, and so forth. Usually by the time Justin came to his three-week review of the master schedule, it was not uncommon for the assembly area to be more than 100 standard hours behind schedule. Clearly, something needed to be done. Justin decided to review some of the areas that could be causing the problem: 1. Job standards Although it had been at least four years since any job standards had been reviewed or changed, Jason felt the standards could not be the problem-quite the opposite. His operations course had taught him about the concept of the learning curve, implying that if anything the standard times for the jobs should be too high, allowing the average worker to complete even more production per hour than that implied by the job standard. 2. Utilization The general manager was very insistent on high utilization of the area. He felt that it would help control costs, and consequently used utilization as a major performance measure for the assembly area. The problem was that customer service was also extremely important. With the problems Justin was having with the master schedule, it was difficult to promise order delivery accurately, and equally difficult to deliver the product on time once the order promise was made. 3. The workers In an effort to control costs, the hourly wage for the workers was not very high. This caused a turnover in the workforce of almost 70% per year. In spite of this, the facility was located in an area where replacement workers were fairly easy to hire. They were assigned to the production area after they had a minimum of one week's worth of training on the equipment. In the meantime, the company filled vacant positions with temporary workers brought in by a local temporary employment service. 4. Engineering changes The design of virtually all the products was changing, with the average product changing with respect to some aspect of the design about every two months. Usually this resulted in an improvement to the products, however, so Justin quickly dismissed the changes as a problem. There were also some engineering changes on the equipment, but in general little in the way of process change had been made. The setup time for a batch of a specific design had remained at about 15 minutes. That forced a batch size of about from 50 to 300 units, depending on the design. The equipment was getting rather old, however, forcing regular maintenance as well as causing an occasional breakdown. Each piece of equipment generally required about three hours of maintenance per week. Since the computer had done most of his calculations in the past, Justin decided to check to see if the computer was the source of the problem. He gathered information to conduct a manual calculation on a week when there were eight people assigned to the assembly area (one person for each of eight machines) for one shift per day. With no overtime, that would allow 320 hours of production. Standard Assembly Product Batch Size Time (minutes per item) Case Analysis 1. With this information, Justin calculated the total standard time required to be within the 320 hours available. Is he correct? Calculate the time required and check the accuracy of his calculation. 2. List the areas you think are causing trouble in this facility. 3. Develop a plan to deal with the situation and try to get the production schedule back under control under the constraints listed.

Answer 1

1) Calculation of Standard time required

a. As per Justin Standard time required is 320 hours

b. Calculation of Standard time did not consider the following aspects

i. Each machine requires 15 min. of setup time between batches

ii. As standard batch size time is not given we will assume that only one batch is produced per machine per day. Therefore We need to add setup time n above time= 15minutes * 5 days *8 machines= 10 hours

iii. Each machine requires 3 hours* 8 machines=24 hours of maintenance per week

Hence total standard time required would be= 286 hours

(Assumption: No information is provided regarding breakdown time for a machine, hence that time is ignored.)

2) Areas causing trouble would be:

a. Front Loading

b. High employee turnover

c. Obsolete machines

3) Plan:

a. Close Front loading technique:

Every week’s target should be new. Carry forward of previous weeks remaining production will bring pressure on labours. And also will end up with the ongoing situation of unachieved targets.

b. Low employee turnover:

For this, importance of learning curve effect must be seen. Learning curve means efficiency gets increased when same work is done over long period of time. Hence as number of new employees increases learning curve decreases. Hence even if labour wages need to be increased, if we are able to keep same employees over long time learning curve theory will lead to increased production and also high employee esteem.

c. New technology:

New machines should be brought in place of old one as old machines cause occasional brake-down even causing high maintenance time and high cost on maintenance reducing production.